Copper futures pushed to fresh five-week highs Friday, as investors remained optimistic that this week's euro-zone debt deal would stave off a credit crunch and support demand for the industrial metal.

The most actively traded copper contract, for December delivery, rose 1.40 cents, or 0.4%, to $3.706 a pound on the Comex division of the New York Mercantile Exchange, the highest settlement price since Sept. 21.

Copper futures surged along with other growth-sensitive assets such as stocks and some commodities on Thursday after the news that euro-zone leaders had agreed to an outline of a plan to ease Greece's debt burden, boost the currency union's bailout fund and pump cash into its banking system.

"Given that the market was starting to price in a deep recession before, it does make sense that we are seeing a rally," TD Securities analyst Bart Melek said of the enthusiasm that lifted commodities markets.

He said growth-sensitive assets also received support this week from separate reports showing growth in the U.S. economy accelerated during the third quarter as consumers increased spending, and manufacturing activity rebounded in top copper consumer China.

The metal sees widespread use in construction and manufacturing, making it particularly sensitive to the economic outlook.

Copper futures had plunged in recent months on worries that Europe was sliding toward a credit crunch, as investors were concerned that the financial troubles could shackle the industrial economy. Economic data from China and the U.S. suggested that the world's top two economies may also be slowing.

But after futures grinded to a 15-month low on Oct. 20, some investors began to view the market as undervalued should European leaders succeed in staving off a financial crisis. Futures rose for five of the next six sessions, climbing by 21% as euro-zone officials closed in on a debt deal.

The supply outlook was also supportive, as Freeport-McMoRan Copper & Gold Inc. (FCX) this week invoked force majeure, a contract provision allowing it to suspend shipments from its massive Grasberg mine in Indonesia. Freeport expects to lose about 100 million pounds of copper production from the mine this year as a result of labor strikes at the mine that began in July.

 
Copper settlements (ranges include electronic and pit trading): 
Nov $3.7020; up 1.35 cents; Range $3.6280-$3.7045 
Dec $3.7060; up 1.40 cents; Range $3.6155-$3.7500

-By Matt Day, Dow Jones Newswires; 212-416-4986; matt.day@dowjones.com

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